VALLIS COMMODITIES LIMITED

A REPORT ON SOMALILAND

16TH NOVEMBER 2017

SOMALILAND COUNTRY REPORT

The Republic of Somaliland, a region of relative calm compared to its

surrounding countries, lies in the Horn of Africa. It has been a self-

declared sovereign state since May 1991, following the conflict that has

consumed Somalia as a result of the brutal Civil War.

Twenty-six years after northern clans declared an independent Republic of Somaliland, it has still not been officially recognized as a country by a single foreign government. This has created difficulties for Somaliland,

including economic ones as donors cannot give any aid money directly to the government, since it is not

identified as one.

Despite this, following a

secessionist struggle,

Somaliland has

maintained a stable

existence and even has a

working political system,

government institutions,

a police force and its

own currency.

Somaliland is a semi-desert territory at the crossroads between Europe, the Middle East and Asia. It boasts qualities varying from its mountain ranges rising up to 7,000 feet, to a security and peace that has encouraged business investments by both local and multi-national companies.

Figure 1: map of Africa showing the location of

Somaliland, as highlighted in red

A REPORT ON SOMALILAND BY VALLIS COMMODITIES LIMITED

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FACTS

POPULATION = 3.5 million, with a life expectancy of 51.8 years - compared to Somalia’s population of 14.87 million and life expectancy of 55 years

CURRENCY = the Somaliland Shilling (SlSh) – with an

exchange rate, in 2015, of 1 USD to 6,000 SlSh due to the country’s lack of recognition

PAYMENTS = both US Dollars and the Somaliland

Shilling can be used – however it is recommended to exchange these before entry into the country and keep everything in small bills

MAJOR LANGUAGES = Somali, Arabic and English –

which is now used frequently, especially in business transactions

MAJOR RELIGION = Islam (Sunni) – the source of many of the social norms; eg. most women wear a hijab in

public

CAPITAL = Hargeisa – known as the one of the safest places in Somalia

POPULATION OF CAPITAL = 1.5 million residents – ¾ of all of Somaliland’s population

SIZE = 176,120km2 - comparable to the area

of Uruguay, or ¾ the area of Britain

BORDERS = Djibouti, Ethiopia and Somalia –

namely Puntland, a semi-autonomous region of Somalia, with whom they dispute certain regions

REGIONS = Awdal, Woqooyi Galbeed,

Toghdheer, Sanaagh and Sool, as shown in Figure 3 - a mixture of wet and dry conditions

URBAN CENTRES = Hargeisa, Burao,

Berbera, Borama, Erigavo and Las Anod – whereas the more rural, least densely populated areas are in the northeast and central regions

COAST = extending 740km to the north, along the Gulf of Aden – with a central port in Berbera, upon which the

national economy hinges

Figure 3: the regions of Somaliland; however, it disputes its border with Puntland as it also claims the regions of Sool and Sanaagh, and portions of

Togdheer

Figure 2: a very rural part of Somaliland, showing: locals using a borehole to obtain water; camels - an important part of Somaliland’s exports; and

the semi-arid ground that covers a lot of the country

A REPORT ON SOMALILAND BY VALLIS COMMODITIES LIMITED

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TOPOGRAPHIC ZONES = 3 topographic zones form Somaliland -

Ogo (the coastal range): a high plateau that ranges from 6,000ft at sea level in the north to 7,000ft at sea level in the south

Guban (the coastal plain): an area of low- lying coastal plains

Hawd (a plateau): red sandy plains that stretch southwards

VISA = a visa is required for entry to Somaliland – generally costing around USD 40, it is obtained at the

Somaliland representative offices in Addis Ababa, the UK, the USA and France

MAIN AIRPORT = Hargeisa Egal International Airport – last renovated in 2013

MAIN PORT = Berbera Port – also provides access to the Indian Ocean for landlocked Ethiopia

TECHNOLOGY = there are approximately 1.5 million mobile phone subscribers in Somaliland – 61% of the total

population

POLITICAL CONTACTS = Ethiopia, Djibouti, Belgium, France, Ghana, South Africa, Sweden, the United Kingdom,

and the United States – so few due to not being officially recognized

SOURCE OF ENERGY = diesel – however renewable energy has a lot of potential; for instance, the Buroa Hospital

set up solar panels and saved around USD 5,500 a month in expenses, and received much more reliable power

A REPORT ON SOMALILAND BY VALLIS COMMODITIES LIMITED

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CLIMATE The humidity of the country varies from 63% in the dry season to 82% in the wet season, with an average annual rainfall of 14.5in – compared with that of the UK’s, that averages at 33.7in per year.

Figure 4: the topographic zones of Somaliland

SUMMER LATE JUNE TO AUGUST

Hot, windy and dry

Often some scattered showers in Ogo

Temperatures can reach up to 38° in Guban

Hargeisa, Somaliland’s capital, doesn’t experience much rainfall, with an average annual precipitation of 16.1in.

The temperature generally ranges from 24°C in June to 17°C in January, providing an average annual temperature of 22°C.

Figure 5: a line graph showing the monthly temperatures of Somaliland

OGO GUBAN

HAWD

WINTER LATE NOVEMBER TO EARLY MARCH

The coolest and driest time of the year

Virtually no rainfall in Ogo and Hawd

Some rainfall in Guban

Human and livestock populations increase in Guban

AUTUMN SEPTEMBER TO EARLY NOVEMBER

The minor rainy reason

Less precipitation than in spring

Still experiences high

temperatures

SPRING LATE MARCH TO EARLY JUNE

The major rainy season

Heaviest rainfall in Ogo and Hawd

A period of fresh grazing and abundant surface water

The breeding season for livestock

A REPORT ON SOMALILAND BY VALLIS COMMODITIES LIMITED

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POLITICS AND THE GOVERNMENT For the first 12 years of Somaliland’s self-declared independence, its government followed a traditional clan-based form of governance.

However, Somaliland’s government is a now multi-party democratic system that is made up of 3 branches: the Legislature – composed of the House of Elders and the House of Representatives; the Executive – composed of the Head of State and his Council of Ministers; and the Judiciary. These branches function separately, exercising the powers allocated to them under the region’s Constitution, that was put into effect in 2001.

Figure 6: Somaliland’s

National Emblem

Even though Somaliland’s government has not been officially recognized, political ties with some foreign governments exist with countries such as Ethiopia, Djibouti, South Africa, Sweden, the US and the UK. As well as this, Ethiopia has a trade office in Hargeisa.

The country’s National Emblem, as shown in Figure 6, has: scales to symbolize justice; the eagle holding the scales as a sign of democracy; 2 hands shaking to symbolize equality and freedom; an olive branch to symbolize peace; the use of yellow to represent the light, beautiful culture and people of Somaliland; and an extract of Islamic calligraphy that translates to “In the name of Allah, Most Gracious, Most Merciful”.

There are still aspects of the Somaliland government policy that are wholly traditional. An example is that the government continues to apply the 1962 penal code of the Somali Republic, due to the influence of their Islamic religion; as such, homosexual acts are illegal.

As shown in Figure 8, as of 2010 the party in power is the Peace, Unity and Development Party, led by the Republic of Somaliland’s fourth president, Ahmed Mohamed Mohamoud Silanyo. Each president is elected for a 5-year term and can serve a maximum of 2 terms. Silanyo is still in his first term of presidency.

Previously President Silanyo, who has a degree from the London School of Economics, held numerous positions within the Somali and Somaliland governments, including in the House of Representatives and as the Minister of Finance.

The general election was viewed as free and fair by international observers despite it being postponed on various occasions for reasons such as drought and the unpreparedness of the National Elections Committee.

Figure 7: the president of Somaliland, Ahmed Silanyo

Figure 8: a table showing the presidents and parties of Somaliland since separation in 1991

TERM OF OFFICE

PRESIDENT

PARTY

1991 – 1993 Abdirahman Ahmed Ali Tuur

Somali National Movement (SNM)

1993 – 2002 Muhammad Haji Ibrahim Egal

Somali National Movement (SNM) (until July 2001)

United Peoples' Democratic Party (UDUB)

2002 – 2010 Dahir Riyale Kahin United Peoples' Democratic Party (UDUB)

2010 – present Ahmed Mohamed Mohamoud Silanyo

Peace, Unity, and Development Party (KULMIYE)

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A REPORT ON SOMALILAND BY VALLIS COMMODITIES LIMITED

In President Silanyo’s term, as well as his ongoing battle to gain international recognition, he has:

• Developed infrastructure throughout the country – an example is the road between Burao and Erigavo.

• Initiated free primary education in 2011 - however this has not gone as planned as the Government does not have sufficient funds to cover the expenses. Some schools have now started demanding fees from the students, including most schools in Hargeisa.

• Enhanced security – for example in Egal International Airport and Berbera International Airport, and a lot of investment (30% of Somaliland’s revenue) is made in the Somaliland Armed Forces.

• Set up a water development program – installing and improving numerous water supply systems.

• Joined others for the improvement of Berbera Port – an example is Dubai Port World, with whom they will be collaborating for the next 30 years.

The current Somaliland Government has been accused of corruption, for example over the long delay of the elections. However, the recent elections are still considered to be much less corrupt than previously. As well as this, despite the fact that the media of Somaliland is permitted to criticize the Government, a very small amount of these publications are actually printed. On occasions journalists are even arrested or detained, suggesting the underlying control the Government has over the media.

Transparency International (TI) has published a Corruption Perceptions Index (CPI), in which the level of corruption present in a country is calculated out of 100, with 0 being the most; it also rates the countries compared to each other. However, seeing as Somaliland is not internationally recognized, the only information available was that of Somalia on a whole. Its level of corruption is a low 10 out of 100, and it comes last out of all the countries, suggesting Somalia experiences the most corruption in the world. Although, this does not fairly represent the situation in Somaliland as since separation in 1991, the country has avoided the terror and corruption that affects Somalia.

Figure 9: a map from Transparency International (TI) showing the level of corruption around the world, with dark red showing the most corruption and yellow showing the least

ECONOMY The economy of Somaliland, which is described as an open economy, heavily depends on international trade. Due to a lack of information, only an estimated GDP of USD 1.9 billion is available for Somaliland for 2015, and an estimated GDP per capita of USD 347. Although this GDP per capita would be the fourth lowest in the world, ahead of Malawi, the Democratic Republic of the Congo and Burundi, it also shows an increase from the estimated GDP of USD 290 in 2003. This is largely due to the peace and stability in the region that has attracted international organizations. It has also faced the problem of trade deficit. However, this has been financed by external aid from mainly NGOs and remittances from the Somaliland Diaspora, which is invested in areas such as education, health services and small businesses. Now the establishment of the Somaliland Development Fund (SDF) has meant that the Government has greater control over external resources. The main factor that is holding back Somaliland’s economy currently is the lack of a structured financial system.

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A REPORT ON SOMALILAND BY VALLIS COMMODITIES LIMITED

SECTOR BUDGET (in USD)

Infrastructure and Natural Resources 10 million

Social 24 million

Government 28 million

Economic 52 million

Security 64 million

Total 180 million

Figure 10: a table showing the estimated budget for different sectors in 2015

EXPORTS

The most important source of income for the Republic of Somaliland is livestock, which is estimated to contribute to almost 30% of the nation’s GDP. In this, camels, cattle, sheep and goats are the primary species. Cereals, crops, hides, and gums (eg. frankincense) are other important exports. Only 3% of Somaliland’s land is under cultivation, but there is an additional 7% of land that has potential. Despite the estimated maximum sustainable yield of 40,000 tons of fish that could be harvested in the national waters, production of fish contributes to less than 2% of the GNP, and so fisheries have a lot of potential. The majority of these exports are shipped from the Port of Berbera to Somaliland’s main trading partners: Saudi Arabia (the leading trading partner), the United Arab Emirates, Yemen, Ethiopia, China, Pakistan, India, Kenya, Brazil, Thailand and Malaysia. Other than that, they are sold predominantly in urban markets, but occasionally in local markets.

IMPORTS

Due to the lack of domestic production, the primary imports are food, fuel and manufactured goods, which once again come in through the Port of Berbera. Somaliland’s main trading partners for imports are Ethiopia, Yemen, Brazil, Thailand, China, Oman, Kenya, Saudi Arabia, Egypt, Malaysia, India, Pakistan, Turkey, the United Arab Emirates, Japan, Malta and Italy.

NATURAL RESOURCES

Somaliland has available a wide range of natural resources, such as gold, iron, lead and rubies. The main deposits drawing international attention are coal, gas and oil, where agreements have already been reached with Genel Energy, Distribution Network Operator (DNO), and Ophir Energy – all based in the UK. Renewable energy has even more potential, especially solar and wind energy, and a legal framework is being developed to better regulate this sector and protect the investors.

DIASPORA

The majority of the Somaliland Diaspora lives in western Europe, north America and the Arabian Peninsula, and they contribute greatly to the economy through the money they remit to the country. As well as this, on returning to Somaliland, these displaced people are able to transfer ideas and knowledge for the success of the nation, further contributing to the economy.

TOURISM

As a result of the prevalent security concerns in countries like Somalia, tourism in Somaliland only creates a small revenue for the country. The main attractions are the natural and manmade landmarks such as the rock art and caves at Laas Geel on the outskirts of Hargeisa and the old British colonial buildings in the historic town Sheekh, near Berbera.

Figure 11: rock art found in the caves

at Laas Geel

In comparison… In Somalia’s

agricultural industry,

bananas, sorghum,

corn, coconuts, rice,

sugarcane,

mangoes, sesame

seeds, beans, cattle,

sheep, goats and

fish are produced.

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A REPORT ON SOMALILAND BY VALLIS COMMODITIES LIMITED

BERBERA PORT

Over the years, the Port of Berbera has seen an increasing amount of port traffic, with the total number of dhows (small ships) and vessels rising from 670 in 2011 to 734 in 2015. This port plays an important role in the success of Somaliland’s income as almost all trade and goods enter and exit the country through it. Not only is the post directly beneficial for the country itself, but also recently the Somaliland Government has signed various trade deals that favour the improvement of the Port of Berbera:

1 - With Dubai Port World (DP World) -

that will mean, for 30 years, DP World

will manage Berbera Port, adding to its

global portfolio of more than 75

terminals. In this, they plan to build a

400m new terminal with a container

section, set up a Free Trade Zone, and

rehabilitate the old port. This also

means that the services provided at the

Port of Berbera will be jointly managed

by DP World and the Somaliland

Government.

Figure 12: a satellite image of the Port of Berbera

2 - With the

United Arab

Emirates – who

plan to build a

250km road

connecting

Berbera and the

border town of

Wajaale.

3 - With

Ethiopia – that

will mean

Ethiopia can

conduct 30% of

its trade

through the

Port of Berbera,

seeing as its

own country is

land-locked.

INVESTMENTS

Almost every sector in Somaliland, from the livestock and fishery sectors to the media sector to the energy sector are potentially prosperous opportunities for investment due to their current developmental immaturity and given that the country is relatively stable. However, investing in Somaliland can prove difficult, due to the structure of the economy: access to credit is limited; transport and power costs are high; and the legal framework can be poorly implemented, all coupled with the informal status of Somaliland as a country. Schemes to address these problems over the recent years have included the Somaliland Development Fund, chartered with rebuilding much needed infrastructure such as roads and water supply systems, which in turn facilitates international and local business opportunities.

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A REPORT ON SOMALILAND BY VALLIS COMMODITIES LIMITED

TAX

The tax system in Somaliland is a regressive tax system, and one that needs improving since the country collects less than 7% of its GDP in tax revenues - below the minimum level of 20% considered by the UN as necessary for sustainable growth. Moreover, corruption exists in this tax system.

Despite this, over recent years the tax system has been shifting from an informal system to a more coherent one, and local authorities are taking control so that it can be dealt with more effectively. In addition, the population of Somaliland is still very willing to pay tax, not only because they want to support their unrecognized country as it receives a very low level of foreign support, but also because they have seen improvements from the income of taxes, such as newly constructed roads, rubbish collection and vehicles for establishments such as hospitals.

Figure 13: a pie chart showing the sources of Somaliland’s tax revenue

Figure 14: a bar graph showing Somaliland’s corporation tax compared to other countries

BANKING

Since 1991, Somaliland has gone from having no banking system in place at all, to having just money transfer companies, to establishing a central bank in 1994, to the instalment of its first commercial bank in 2009.

Currently, Somaliland has a dual banking system, encompassing a Western banking system and an Islamic banking system, and a lot of the banks, especially in Hargeisa, are often crowded. Furthermore, most banks provide business, international, personal and private banking to their clients, and accommodate commodities exchanges.

The Bank of Somaliland, which formed in 1994, is the Central Bank of Somaliland. It also operates as a commercial bank and has 8 branches throughout the country.

Image 15: a map showing the location of some of

the banks in Hargeisa, shown by the symbol:

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Another prominent bank, Dahabshiil, operates in 155 other countries as well as Somaliland, including Somalia, Djibouti and Ethiopia. With the country’s tallest building, an eight-storey office in Hargeisa, Dahabshiil set up its first commercial bank in 2014 and now has domestic banking branches located in the rural areas of Somaliland. It offers services such as insurance, letters of credit and interbank financial transfers.

Another bank that has a branch in Hargeisa is the ‘Banque pour le Commerce et l'Industrie – Mer Rouge’ (BCIMR). It was first established in Djibouti, where it is now the largest bank in the Horn of Africa, with a market share of around 45%. In addition, BCIMR was the bank that opened the first commercial bank in Somaliland, in February 2009.

There are only a few ATMs in Somaliland and they accept Visa, Mastercard, American Express and Salaam Card. ATMs are found in locations such as the Ambassador Hotel and Safari Hotel of Somaliland, however there are plans to set up more.

TRANSPORT AND COMMUNICATION TRANSPORT

As well as bus services that operate in Hargeisa, Burao, Gabiley, Berbera and Borama, Somaliland has road transport services between the major towns and neighbouring villages, which are operated by vehicles such as taxis (a slightly more expensive form of transport), four-wheel drives, minibuses and vans. However, despite this, as a foreign traveller, to leave the capital you are required to be accompanied by a government security guard – a British-trained Special Protection Unit (SPU), costing around USD 20 per day - and so a hire car is recommended. It is possible however to get an exemption from this and the paperwork is required as soon as you reach the checkpoints on the edge of the city. As well as this, an official form from the Ministry of Commerce, Industry and Tourism that lists the places you intend to visit is advisable, to reduce the time spent at the checkpoints outside Hargeisa.

Figure 17: a table showing the airlines operating in Hargeisa and their destinations

Somaliland possesses relatively little rail infra- structure, however there is a scheme underway for the creation of a railway to connect Ethiopia with the Port of Berbera. It is recognized that this would be a major challenge due to the difficulty of obtaining vital international aid, however, as Somaliland is relatively stable there is not nearly as much of the threat of sabotage as in Somalia.

The main airport in Somaliland is the Hargeisa Egal International Airport, where an arrivals tax of up to USD 60 per person is required. It was last renovated in 2013, with enlarged arrival and departure terminals and five new wind turbines in order to offer a more cost-effective alternative to diesel and assist powering the airport. Another airport is Berbera International Airport, however it is becoming much less frequently used than Egal Airport. in 2015, the total number of flights at Berbera Airport was 34, compared to the large total of 2577 flights at Egal Airport. Both airports transport a combination of passengers and cargo in and out of Somaliland.

Figure 16: a mode of public transport used in Somaliland

AIRLINES DESTINATIONS

Air Arabia Sharjah (United Arab Emirates)

Air Djibouti Ambouli (Djibouti)

African Express Airways Berbera (Somaliland) Cairo (Egypt) Dubai Mogadishu (Somalia) Nairobi (Kenya) Sharjah (United Arab Emirates)

Daallo Airlines Ambouli (Djibouti) Dubai Jeddah (Saudi Arabia) Mogadishu (Somalia)

Ethiopian Airlines Addis Ababa (Ethiopia)

Flydubai Dubai

Jubba Airways Bosaso (Somalia) Djibouti Dubai Galkayo (Somalia) Garowe (Puntland / Somalia) Jeddah (Saudi Arabia) Mogadishu (Somalia)

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ROADS

The condition of the roads has been one of the main aspects of Somaliland that creates difficulty when travelling. There are only 770km of surfaced roads and the 8,000km of dirt roads rarely regraded. This meagre infrastructure cannot cope with an increasing amount of traffic and so much of the it is in a bad shape, with potholes slowly becoming large gaps. The road linking the towns of Dila, Hargeisa, Berbera, Buroa, Ainabo, and Las Anod is the only inter-urban tarmac road in Somaliland.

However, in the recent years there have been many projects put in place for the maintenance, reconstruction and even construction of the road infrastructure throughout Somaliland. This is funded by a fuel levy, road tax and transport fees. The main objective is to regrade the 241km “Berbera Corridor” that links the Port of Berbera, through Hargeisa, to the capital of Ethiopia, Addis Ababa, as shown in Figure 18. Moreover, there is also a road in Ethiopia that connects the Berbera Corridor to Djibouti which is beneficial for the Djiboutian businesses already set up in Somaliland.

TELECOMMUNICATIONS

POWER

In 2010, Somaliland had an estimated generating capacity of 77 MW, although only 44% of this generating capacity was actually realized because of the potentially poor condition of the generators. The only more recent information available for the generated capacity is for Somalia on a whole (including Somaliland) in 2014, which is estimated to be 81 MW, showing a small improvement. In this, it costs just under UDS $1 per kWh, compared to the cost in America of just USD 0.12 per kWh. It is one of the most expensive commodities in Somaliland because of the state of the infrastructure and the use of diesel. Diesel is almost the only fuel used in Somaliland for electricity generation, however there is a large potential for renewable energy throughout the country that some Somalilanders have already taken advantage of, as shown in Figure 19. Somaliland, like most of Africa, experiences frequent power cuts.

In Somaliland, an international telephone call is less than USD 0.20 per minute, which makes it one of the cheapest for international calls in Africa. As well as other various private telephone companies set up in Somaliland, Telesom, founded in 2002, is one of the largest operators. The firm has the objective of supplying the local market with services such as fixed line, internet access and GSM (Global System for Mobile Communication), for which you can easily buy a SIM, and consequently save charges on roaming. Telesom is a major asset for Somaliland as it provides communication between enterprises and an extensive network that covers all of Somaliland's major cities and more than 40 districts in both Somaliland and Somalia. As well as this, telecommunication services are enhanced by a fibre optic infrastructure, installed by SOMCABLE, that covers a total distance of 1,200km and connects Somaliland’s major cities and towns and the rest of the world. Internet connection speeds vary from pretty good to acceptable, and it can be found in the Internet Cafés in the major towns, and as a complimentary service in most hotels.

POST

Although there is an absence of postal services throughout Somaliland, DHL Express serves the capital Hargeisa.

MEDIA

The official radio of Somaliland is government-owned Radio Hargeisa, which was set up in 2001. Although there is also the BBC and various internet-based radio stations. Similarly, there is one government-owned television station called Somaliland National Television, plus some satellite stations, such as HornCable TV and Universal TV, which broadcast from the Middle East and London, and so channels in English are available.

Figure 19: 2 wind turbines set up in Hargeisa to help power the Edna

Adan Hospital

Figure 18: a map showing the “Berbera Corridor”

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A REPORT ON SOMALILAND BY VALLIS COMMODITIES LIMITED

TIMELINE

May 1991

The former British

Somaliland

declared unilateral

independence as

the Republic of

Somaliland

2001 2005

More than 97% of the population

voted to validate

the region's

constitution, in a

referendum aimed

at affirming

Somaliland's self-

declared

independence

Somaliland voted in the first multi-

party

parliamentary

elections since

their separation

from Somalia

2007

Tensions between

Puntland and

Somaliland over

who has control

over certain

regions escalated

into violence

several times

2009

The Banque pour

le Commerce et

l'Industrie – Mer

Rouge (BCIMR),

based in Djibouti,

opened a branch

in Hargeisa and

became the first

commercial bank

in the country

since the

separation

June 1960 1960 1969

The former British

Somaliland

protectorate

briefly obtained

independence as

the State of

Somaliland, with

the intention that

the territory

would unite with

the Trust Territory

of Somaliland

The Trust Territory of Somaliland

followed suit and

the 2 territories

united to become

the Somali

Republic

Dictator Mohamed

Siad Barre

staged a coup

and overthrew

the President.

Northern Somalia

(current

Somaliland)

rebelled against

Siad Barre, which

fuelled the

Somali Civil War

1988

The Siad Barre

Government

began a

crackdown

against the

Hargeisa- based

Somali National

Movement (SNM)

and other militant

groups, mainly

situated in the

north of the

Republic of

Somalia

1991

Somali President

Mohamed Siad

Barre was

ousted and his

government

collapsed

2016

Somaliland celebrates

25 years of self-

declared independence,

but remains

unrecognized, despite

being a mature state

with a government,

currency, flag, the

ability to enter relations

with other countries,

etc.

Figure 20: a Somalilander celebrating the

country’s independence Figure 21: the Somaliland currency, SlSh

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A REPORT ON SOMALILAND BY VALLIS COMMODITIES LIMITED

SECURITY Health – Some of the most prevalent health issues in Somaliland are: mental health, female genital mutilation, malaria and infectious diseases. The drought that Somaliland is currently experiencing also causes health issues for the region. However, the government has succeeded in setting up a health service with a public hospital in every region and mother and child centres throughout Somaliland. By 2015, 36 hospitals, 101 health centres and 164 health posts had been set up throughout the country. The best-resourced hospital is the Edna Adan Hospital, located in Hargeisa. Moreover, from working with the health ministries of Puntland and Somalia – as they mainly receive aid as a country overall – they have managed to increase the number of female community health workers. Despite this, challenges are still faced such as the need for more trained professionals, a stronger and more reliable supply of electricity, and public recognition. Public recognition is becoming a necessity for Somaliland so that it can receive aid directly.

Safety – Somaliland is a relatively safe territory, having, in the main, not been directly affected by the war in southern Somalia since separation in 1991. Even though a British-trained Special Protection Unit (SPU) is required for foreigners if they want to leave the capital Hargeisa, this requirement is generally to prevent anything happening in order to protect Somaliland’s image, which is already fragile due to its location in Africa, next to Somalia. This is so tourists and other sources of income for the country are not deterred by the prospect of danger. Even though Somaliland is a lot safer than the rest of Somalia, the risk of terrorism still exists, on land and in the sea, where piracy is also a threat.

Military – The Somaliland National Armed Forces comprises 13,000 men in the navy and the army - with a chain of command implemented in 2013. The armed forces receive generous funding, but since the region is not internationally recognized they are not able to obtain weapons. Despite this, soldiers do have access to old weapons and potentially illegal weapons from neighbouring countries, and the navy is equipped with boats mounted with guns provided by the UK in order to combat piracy. As well as this, the UK has previously provided the National Armed Forces with training packages. It is significant that the National Armed Forces receive a high percentage of the Somaliland revenue to counter the threats of terrorism and piracy.

Police – The Somaliland Police was founded from several militant organizations, including the Somali National Movement, and it is controlled by the Somaliland National Armed Forces. These police and security forces of Somaliland are sometimes accused of using excessive force. According to a report by the Human Rights Centre (HRC) in 2015, police stations – which are intended only to hold individuals for up to 48 hours - are used for long-term detention where the offenders are often held without food or other basic necessities, exacerbated by overcrowding. Despite this, under United Nations supervision it is stated that the prisons have been improving.

Border Control – To cross the border of Somaliland, a visa, a receipt for it, a passport and a good deal of caution is required due to the cross over in policies. Both land borders in Djibouti and Ethiopia are open with frequent buses and taxis traffic. Border control in Somaliland is an area that needs a lot of development, as not only is there a lack of communication and organization, but also a lot of the infrastructure and technology is outdated, as shown by the border control office in Figure 23. As a result, the time it takes to cross the border varies greatly.

Accommodation – Of the small amount of accommodation that is available in Somaliland, most of it is always strongly guarded. As well as this, a lot of the hotels will personally arrange the British-trained Special Protection Unit (SPU) for travel outside of Hargeisa. Accommodation is available in other cities as shown in Figure 24, but is limited, and, due to a lack of information, only an approximate range of USD 15 to 50 per night can be determined on price. The hotels in the capital offer services such as free Wi-Fi, free parking, food, room service, airport transport, conference rooms and business centres.

Figure 22: an entrance

into Somaliland

Figure 23: border control office in Somaliland

Figure 24: a graph showing the number of hotels in certain cities of Somaliland in 2015

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RELATIONSHIP WITH SOMALIA Since 1991, the relationship between Somaliland and Somalia has been strained; Somalia has never been in favour of Somaliland’s self-declared independence.

Despite having started to try and form a future relationship with each other in 2012 - mostly on the part of Somaliland - this collapsed in 2015 because Somalia failed to fulfil what had been agreed and was uncommitted to the discussions. Even now, the Somali Government is reluctant to collaborate with Somaliland in any way.

The attitude of Somalia’s new president Mohamed Abdullahi Mohamed did suggest that the situation had the potential to change at the beginning of his presidency in February 2017. However so far, he does not appear to support recognition.

THE BATTLE FOR RECOGNITION Somaliland has received some support in its battle to become globally recognized as a country from organizations such as the Senlis Council – an international research association that focuses on conflict zones such as Somalia.

In 2007, both the European Union and the African Union stated that discussions would be taking place to address the subject of Somaliland’s future international acknowledgement. However, it does not appear that any progress has been made, since the African Union believes the change would open up too much uncertainty, Ethiopia wishes to protect its relationship with Somalia, and Djibouti has economic reasons for not engaging in the process. Moreover, the previous Somali President Hassan Sheikh Mohamud simply opposed the independence. The West has supported this position, being reluctant to encourage other separatist movements and to compromise its relationship with the Somali government.

In January 2008, the State Department declared that "while the United States does not recognize Somaliland as an independent state, and we continue to believe that the question of Somaliland's independence should be resolved by the African Union, we continue regularly to engage with Somaliland as a regional administration." Although recognition seems invariably out of their reach, Somaliland continues in its efforts to make this possible and still does receive some aid.

RELIGION Under the Constitution of Somaliland, the state religion is Islam, where nearly all the Somaliland residents are Sunnis. This religion impacts a lot of the social norms and customs of the country, as well as the laws; an example is that alcohol is prohibited there. Even though the promotion of any other religion is illegal, different personal beliefs are permitted. This has resulted in a small number of Christians in Somaliland that have come from Catholic institutions in Aden, Djibouti, and Berbera.

CULTURE Somaliland has a rich culture due to the wide range of Somali heritage and Islamic structures. Important forms of art include poetry, Henna paintings, the traditional dance Ceeyar Somali and jewellery. Apart from the commemoration of independence, other celebrations are focused around the religious festivals of Islam. Cuisine is diverse, incorporating a mixture of native Somali, Ethiopian, Yemeni, Arabian, Turkish, Italian and Indian influences, as a result of the trade and commerce.

Figure 25: the unsuccessful meeting in 2012 between Somaliland President Ahmed Silanyo and incumbent Somali President Sharif

Sheikh Ahmed

Figure 26: one of the many mosques found in Somaliland

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THE CAPITAL, HARGEISA Hargeisa is situated in a mountainous area, enclosed in the valley of the north-western Ogo region. It comprises very friendly residents who want to make you feel welcome.

Hargeisa was widely affected by the Somali Civil War, and so since 1991 it has been largely renovated with newer structures and high- rise buildings, financed by local entrepreneurs and the Somali Diaspora. Now, it is the financial centre to many entrepreneurial industries, ranging from gem stonecutters, to construction, to food processing, to retail.

PUNTLAND Puntland, a neighbouring region to Somaliland, has been semi- autonomous since 1998. However, it differs from Somaliland because although it is self-governing, Puntland does not seek independence. There is tension between Somaliland and Puntland because of the disputed area they share, and the most recent clash between the 2 areas was in 2016, although this proved to be less serious than other disputes in the region’s history. The Somali Government generally goes against Puntland’s claims over the territories: Sool; Sanaagh; and portions of Togdheer. Despite this, even though it appoints the control of these territories to Somaliland, the Somali Government still does not acknowledge Somaliland as an actual country.

CONFLICT OVER THE PORT OF BERBERA Even though Somalia has had no presence in Somaliland since self-declared independence in 1991, Somalia’s government claims to have control over the Port of Berbera. Despite this, countries such as Ethiopia, while maintaining friendly relations with both countries due to the political conflict between them, have decided to enter into their own agreements with Somaliland. This has meant that trade can develop between Somaliland and other countries.

Figure 28: a map showing the disputed area between Somaliland and Puntland

Figure 29: the Port of Berbera

THE TRUST TERRITORY OF SOMALILAND After being occupied by British and South African troops, Italian Somaliland was made a Trust Territory by the United Nations under Italian administration in 1950. Because of this connection with the United Nations and Italy, The Trust Territory of Somaliland received a lot of UN aid money and had a presence of many experienced Italian administrators, meaning that the area flourished. This was not the case for the former British Somaliland protectorate which did badly due to insufficient investment and a lot of local resistance. Due to the imbalance in economic development and political experience between the 2 territories, difficulties arose when they united and formed Somalia.

Figure 30: the location of the Trust

Territory of Somaliland, in green

Figure 27: a panorama of Hargeisa

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SOMALI REPUBLIC The Somali Republic was formed in 1960, following the union of the Trust Territory of Somaliland and British Somaliland, and a new constitution was put in place. Due to the differences created by the British and Italian administrators in the north and south, the Somali Republic experienced several rebellions, especially in the north, but this divide was eventually blurred through policies adopted by the government. However, in 1969 the incumbent President was assassinated, and a military coup followed, spearheaded by Major General Mohamed Siad Barre commanding the army at the time. Barre’s government became increasingly unpopular, re-forming the north and south divide and creating resistance movements such as the northern Somali National Movement, and eventually fuelling the Somali Civil War.

THE SOMALI NATIONAL MOVEMENT The Somali National Movement was a rebel group with the purpose of overthrowing the Siad Barre dictatorship. It played a big part in Somaliland’s self-declared independence, and even the current President Silanyo was a leader of the movement, from 1984 to 1989.

SUMMARY

Somaliland functions as a separate state to Somalia

A principal problem for Somaliland is the lack of international aid they receive

The Port of Berbera is of great importance to Somaliland as it handles most of the region’s imports and exports

26 years after separation, Somaliland remains unrecognized

A growing number of international entities are entering into deals with Somaliland

Figure 31: the flag of the Somali National

Movement

Somaliland is a relatively peaceful and stable area

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